2nd Annual Report

Transcription

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2 2nd Annual Report BOARD OF DIRECTORS Mirae Asset Trustee Company Private Limited Mr. V. B. Haribhakti Mr. S. T. Gerela Mr. K. Ramasubramanian Mr. N. N. Jambusaria Mirae Asset Global Investments (India) Private Limited (AMC) Mr. B. N. Chakraborty Dr. Manoj Vaish Dr. Lee Tuck Chung Mr. Arindam Ghosh Sponsor: Mirae Asset Global Investments Company Limited Registered office: 45-I, Yoido-Dong, Youngdeungpo-Gu, Seoul, Korea Trustee: Mirae Asset Trustee Company Private Limited Registered Office: Unit No.606, Windsor Building, Off. C.S.T Road, Kalina, Santacruz (East), Mumbai Asset Management Company: Mirae Asset Global Investments (India) Private Limited Registered & Corporate Office: Unit No.606, Windsor Building, Off. C.S.T Road, Kalina, Santacruz (East), Mumbai Custodian: Standard Chartered Bank: Mahatma Gandhi Road, Fort, Mumbai Statutory Auditors: S.R. Batliboi & Co., Chartered Accountants 6 th floor, Express Towers, Nariman Point, Mumbai Registrar & Transfer Agent: Karvy Computershare Private Limited Karvy Plaza; H No , Avenue 4, Street No 1, Banjara Hills, Hyderabad

3 Annual Report of Mirae Asset Mutual Fund for the year ended March 31, 2009 Dear Unit holder, The Trustee Company presents its second report and the audited financial statements of the Schemes of Mirae Asset Mutual Fund (the Fund ), for the year ended March 31, MIRAE ASSET MUTUAL FUND During the year ended March 31, 2009, the Fund made its foray of equity products in the Indian Mutual Fund industry with the launch of its equity products viz. Mirae Asset India Opportunities Fund, an open-ended equity oriented scheme and Mirae Asset Global Commodity Stocks Fund, an open-ended equity fund. Besides, the fund also launched Mirae Asset Cash Management Fund, an open ended liquid fund, Mirae Asset Interval Fund with three plans namely Quarterly Plan with Series I & II and Monthly Plan Series I, a debt oriented interval scheme and Mirae Asset Gilt Fund - Investment Plan & Savings Plan, an open ended gilt scheme. The Average Assets Under Management (AUM) were Rs crores as at 31st March, The NFO of Mirae Asset India Opportunities Fund generated Rs crores, Mirae Asset Global Commodity Stocks Fund generated Rs crores, Mirae Asset Cash Management Fund generated Rs crores, Mirae Asset Gilt Fund - Investment Plan generated Rs 5.36 crores, Mirae Asset Gilt Fund - Saving Plan generated Rs crores, Mirae Asset Interval Fund - Quarterly Plan - Series I generated Rs crores, Mirae Asset Interval Fund - Quarterly Plan - Series II generated Rs crores and Mirae Asset Interval Fund - Monthly Plan - Series I* generated Rs crores. *- During the year under review, Mirae Asset Interval Fund - Monthly Plan - Series I was wound up in compliance with SEBI Circular dated December 12, The Fund(s) has declared dividends under its various Schemes and a list of such dividends is annexed and forms part of the Annual Report. During the period, the Average Assets under management were Rs crores as at 31st March, 2009 Past Performance is no guarantee of future results. No new Schemes were launched since period ended March 31, 2009 DEBT MARKET OVERVIEW The Reserve Bank of India in its annual policy has estimated GDP growth for FY 10 to be at 6%, lowered its liquidity estimate at 17% from 19%, deposit growth at 18% and credit growth at 20%. Reserve Bank of India has cut the repo rates to 4.75% from 5 % levels and the reverse repo rate to 3.25% from 3.50% levels. RBI has kept CRR at 5%. The Open market Operations for Rs. 80,000/- Crores and Market Stabilisation Scheme buyback of Rs.40,000/- crores is expected to add Rs.12,0000/- Crores in the next six month. RBI has re-iterated its commitment to conduct the market borrowing program in a non - disruptive manner and keep interest rates low. RBI also advised the banks to reduce their prime lending rates and lend more to the commercial sector. On the inflation front, the RBI expects upcoming negative readings on the WPI to reverse by midyear and to 4% by end of FY There has been a widening in the current account deficit to US$14.6 billion (previous US$ 12.8 billion). Capital flows in third quarter of FY 09 were negative, due to portfolio outflows. With the outlook for capital flows remaining bleak we expect overall deficit to be high. The Industrial Production numbers for the month of April 2009 was reported at 1.4%, the key reason being rise in domestic demand. If the rains are normal, the food inflation should come down. DEBT MARKET FUTURE OUTLOOK There is plenty of liquidity with Rs.1,00,000 crores going in to reverse repo. Exports continue to be bleak due to slowdown globally. Inflation for the week ended was reported at 0.13% mainly because of the base effect. Lower inflation may prompt RBI to cut rates further. However the rising crude prices are a matter of concern (US Inventory is inversely related to crude prices and at present US inventory going down, coupled with economic activity in China leading to rising demand for crude, and hence both these factors has lead to rise in the crude prices). As per the latest figures released by RBI although the deposit base is increasing, the credit off take is not happening. We maintain our view that the incremental money will flow in to government securities and corporate bonds at the shorter end of the yield curve. Government spending has resumed as the new government is front loading its expenditure to kick start the economy leading to increase in scheduled borrowing calendar. This is creating some volatility in the auctioned segments. The market is expected to be well bid in the coming days as insurance companies and provident funds are showing interest to buy at these levels alongwith nationalized banks. 2

4 2nd Annual Report EQUITY MARKET OVERVIEW During FY09 the market conditions have been the most challenging in 100 years due to the global meltdown arising out of global credit crisis and US housing market collapse. In an integrated world, credit around the world was seized up, and the fallout impacted venerable firms alongside broader stock and bond indexes. Most global banking / investment banking & insurance firms holding many of the complex financial derivatives (for which they had limited understanding of the worst case scenario) became victims of this financial tsunami. The resultant de-leveraging cycle and heightened risk aversion led to a severe contraction in the global demand. Volatile financial markets and economic recession weighed heavily on investors during FY09. In the recent weeks, the mood in the global markets have become slightly optimistic as the latest economic data has pointed to some green shoots to recovery on hopes of positive impact of aggressive policy intervention. Despite strong gains in March 09, markets globally fell sharply during the year: Indices 31-Mar-09 1-Apr-08 % Chg BSE Sensex % Nifty % BSE % Dow % S&P % Source - Bloomberg. FUTURE OUTLOOK OF EQUITY MARKET A key point to recognize is that global financial turmoil is being addressed by global action. Central banks around the world have coordinated their efforts to cut interest rates and supply liquidity to frozen funding markets. In the U.S., the Federal Reserve and Treasury Department have moved rapidly to establish new programs for easing money-market pressures and handling troubled financial assets. A number of governments have also intervened to rescue major financial institutions or find an orderly way for them to be acquired. The outcome of all of these efforts may take a while to be realized, but we believe that these multi-pronged worldwide actions mark a significant turning point. India is still well below long-run average levels on many of the standard valuation metrics - P/E, P/BV and P/CF. On a forward PER basis, India is currently trading on 13-14x. We continue to believe despite the run-up, that valuations are still below long-run average levels and the key indicators of the cycle globally moving higher. We believe that the 12-month risk / reward trade-off for Indian equities is attractive. Fiscal and monetary measures should help rejuvenate economy growth. We believe that the longer term outlook for equities in India remain positive due to its relatively strong fundamentals and faster growth than its developed counterparts. Over the last 2 months in the current fiscal, various steps taken by central bankers and stimulus packages around the globe and India have seemed to start working and we are witnessing early signs of recovery. Strong favorable general election result has lead to expectation of fiscal consolidation and various initiatives by the Govt. to spur growth in the years to come. FUTURE OUTLOOK OF THE FUND AND OPERATIONS OF THE SCHEMES The Mutual Fund industry in India went through one of the most challenging times in 2008 on the back of the global meltdown arising out of US credit crisis and Housing market collapse which had a cascading effect across the economies world over. The year 2009 has begun on a slightly positive note with the belief gaining credence that the worst for the mutual fund industry has been left behind. The recent industry trends suggest that the investors are once again becoming slightly risk averse with improvement in market conditions and economic recovery in sight. The AMC intends to pursue growth through offering various asset class products with investments in both Indian & Global markets. Our India operations are now a year old and is in the early stages of establishing its presence by offering investor value added products, superior investment performance and matching them up with top class services. Mirae Asset will continue to endeavor on its four point strategy of (1) Strong Brand Positioning (2) Investment Performance (3) Investor Education and (4) Innovative Products. OBJECTIVES, INVESTMENT POLICY & PERFORMANCE OF THE SCHEMES: (A) EQUITY FUNDS (I) MIRAE ASSET INDIA OPPORTUNITIES FUND (MAIOF), an open ended equity oriented scheme The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities through predominantly investing in equities, equity related securities. There is no assurance or guarantee of any returns. 3

5 The Scheme aims to maximize the long term capital appreciation by finding investment opportunities resulting from Indian economic growth and its structural shifts through investing in equities, equities related securities with risk mitigating and controlling measures. The scheme has outperformed its benchmark (BSE 200) since its inception. The outperformance was largely due the scheme s overweight position in Petroleum Products & Gas, Utilities, Pharmaceuticals and Consumer related sectors. The scheme also benefited from its focus on businesses which can sustain themselves in the prevalent challenging macroeconomic environment. The net assets of Mirae Asset India Opportunities Fund amounted to Rs Crores as at March 31, As at March 31, 2009, 88.50% of the net assets were invested in equity shares and balance in index derivative, fixed deposits and money market instruments. Comparison of the performance of Mirae Asset India Opportunities Fund with benchmark returns as on 31 st March, 2009:- Scheme Name NAV as on Absolute Benchmark** 31 st March, Returns since returns (%) 2009 inception* (%)^ (Absolute) Mirae Asset India Opportunities Fund - Regular -Growth The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. * Date of Allotment / Inception date:- 4 th April 2008 ** Benchmark:- BSE 200 ^ Past performance may or may not be sustained in future. (II) MIRAE ASSET GLOBAL COMMODITY STOCKS FUND (MAGCSF), an open ended equity fund The investment objective of the scheme is to generate long term capital appreciation through an actively managed portfolio investing in equity and equity related securities of companies that are engaged in Commodity and commodities related sectors / sub sectors / industries, with at least 65% of the corpus invested overseas in Asia Pacific and Emerging Markets. There is no assurance or guarantee of returns. The commodities may include, for example, energy commodities, metals & materials, food and agricultural commodities and other commodities. The Energy Commodities include Crude Oil, Natural Gas, Gasoline, Coal and Coking Coal etc. The Metal and Materials include aluminium, copper, gold, zinc, silver, lead, platinum, steel, nickel, tin and iron ore, etc. The Food and Agro based Commodities include wheat, corn, cotton, sugar, rubber, soybeans, coffee, rice and meat etc. The scheme has underperformed its benchmark ((MSCI Asia Pacific ex-japan Energy & Material Index (55%) + MSCI India Energy & Material Index - (35%) + MSCI Brazil Energy & Material Index - (10%)). The underperformance was largely due to underweighting of certain stocks in the portfolio and also higher levels of cash and cash equivalents during the inception of the scheme. The net assets of the Mirae Asset Global Commodity Stocks Fund amounted to Rs Crores as at March 31, As at March 31, 2009, 94.08% of the net assets were invested in equity shares and balance in CBLO, fixed deposits and others. Comparison of the performance of Mirae Asset Global Commodity Stocks Fund with benchmark returns as on 31 st March, 2009:- Scheme Name NAV as on Absolute Benchmark** 31 st March, Returns since returns (%) 2009 inception* (%)^ (Absolute) Mirae Asset Global Commodity Stocks Fund - Regular - Growth The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. * Date of Allotment / Inception date:- 20 th August 2008 ** Benchmark:- MSCI Asia Pacific ex-japan Energy & Material Index (55%) + MSCI India Energy & Material Index - (35%) + MSCI Brazil Energy & Material Index - (10%). ^ Past performance may or may not be sustained in future. 4

6 2nd Annual Report (B) (I) GILT FUNDS MIRAE ASSET GILT FUND (MAGF), an open ended gilt fund MAGF is an Open ended Gilt Scheme. The scheme has two plans i.e. Investment Plan and Savings Plan. (a) Investment Plan: The investment objective of the scheme is to seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of sovereign securities issued and guaranteed by Central and State Government with residual maturity ranging from 1 year to 20 years or higher. There is no assurance or guarantee of any returns. The Plan intends to invest predominantly in a portfolio comprising of Government securities with residual maturity ranging from 1 year to 20 years or higher. The average portfolio maturity duration of the plan will exceed 4 years. (b) Savings Plan: The investment objective of the scheme is to seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of short to medium term Government securities guaranteed by Central and State Government with an average portfolio maturity duration not exceeding 5 years. There is no assurance or guarantee of any returns. The fund will be managed according to its objective and thereby seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of sovereign securities issued and guaranteed by Central and State Govt. The Scheme may also invest in money market instruments which include but is not limited to treasury bills, CBLO, repo / reverse repo and any other like instruments as are and or may be permitted under the Regulations and RBI from time to time. The Plan intends to invest predominantly in a portfolio comprising of short to medium term Government securities with an average portfolio maturity duration not exceeding 5 years. The investment team will take an active view of the interest rate movement by keeping a close watch on various macroeconomic parameters of the Indian economy as well as developments in global markets. Investment views / decisions will be taken on the basis of the various factors like, prevailing interest rate scenario, Government s borrowing programme, level of liquidity in the banking system, inflation levels and overall macro economic growth of the country. The schemes has outperformed its benchmarks since its inception. The outperformance was mainly due to active duration management, security selection as well as trading in government bonds. The performance of the scheme is benchmarked against I Sec Li-Bex for Investment Plan & I-Sec Si-Bex for Savings Plan. The net assets of the Mirae Asset Gilt Fund - Investment Plan amounted to Rs Crores as at March 31, 2009 while the net assets of the Mirae Asset Gilt Fund - Savings Plan amounted to Rs crore as at March 31, As at March 31, 2009, 68.11% in Government securities in Investment Plan and the balance were invested in CBLO. As at March 31, 2009, 100% of the net assets were invested in CBLO in Savings Plan. Comparison of the performance of Mirae Asset Gilt Fund with benchmark returns as on 31 st March, 2009:- Scheme Name NAV as on Absolute Benchmark** 31 st March, Returns since returns (%) 2009 inception* (%)^ (Absolute) Mirae Asset Gilt Fund - Investment Plan Mirae Asset Gilt Fund - Investment Plan - Regular Growth Mirae Asset Gilt Fund - Savings Plan Mirae Asset Gilt Fund - Savings Plan - Regular Growth The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. * Date of Allotment / Inception date:- 6 th February 2009 ** Benchmark:- I Sec Li-Bex for Investment Plan & I Sec Si-Bex for Savings Plan. ^ Past performance may or may not be sustained in future. 5

7 (C) (I) LIQUID / MONEY MARKET FUNDS MIRAE ASSET CASH MANAGEMENT FUND (MACMF), an open ended liquid fund The investment objective of the scheme is to seek to generate returns linked to short end rates like MIBOR and CBLO etc. and provide higher liquidity by investing in a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. This scheme is meant for investors to deploy their funds for a short period of time. The fund will be managed according to the investment objective, thereby seeking to generate returns linked to MIBOR, call and CBLO etc. commensurate with low risk and shall maintain high liquidity for the purpose of meeting the liquidity requirements of the investors. The scheme has underperformed its benchmark (CCIL MIBOR) since its inception. The impact of scheme related expenses has led to the underperformance of the scheme as compared to its benchmark. The net assets of the Mirae Asset Cash Management Fund amounted to Rs Crores as at March 31, As at March 31, 2009, 100% of the net assets were invested in CBLO. Comparison of the performance of Mirae Asset Cash Management Fund with benchmark returns as on 31 st March, 2009:- Scheme Name NAV as on Absolute Benchmark** 31 st March, Returns since returns (%) 2009 inception* (%)^ (Absolute) Mirae Asset Cash Management Fund - Regular - Growth The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. * Date of Allotment / Inception date:- 12 th January 2009 ** Benchmark:- CCIL MIBOR. ^ Past performance may or may not be sustained in future. (II) MIRAE ASSET LIQUID FUND (MALF), an open ended liquid scheme: The investment objective of the scheme is to seek to generate reasonable returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. This scheme is meant for investors to deploy their funds for a short period of time. The fund will be managed according to the investment objective, thereby seek to generate reasonable returns commensurate with low risk. The scheme will invest in money market and other debt securities and shall maintain high liquidity for the purpose of meeting the liquidity requirements of the investors. The scheme has underperformed its benchmark (Crisil Liquid Fund Index) since its inception and over the financial year. The scheme witnessed significant outflow during the second quarter as market participants preferred to redeem from liquid funds amid risk aversion due to the prevailing liquidity crunch and to take advantage of higher fixed deposit rates. The scheme has underperformed mainly due to higher exposure to CBLO / Repo rate instruments as compared to its benchmark. The net assets of the Mirae Asset Liquid Fund amounted to Rs.1.85 Crores as at March 31, As at March 31, 2009, 100% of the net assets were invested in CBLO. Comparison of the performance of Mirae Asset Liquid Fund with benchmark returns as on 31 st March, 2009:- Scheme Name NAV as on CAGR Benchmark** 31 st March, Returns since returns (%) 2009 inception* (%)^ (CAGR) Mirae Asset Liquid Fund - Regular Plan - Growth % 8.84% The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. CAGR - Compounded Annualized Growth Returns * Date of Allotment / Inception date:- 5 th March 2008 ** Benchmark:- CRISIL Liquid Fund Index ^ Past performance may or may not be sustained in future. 6

8 2nd Annual Report (D) (I) (E) (I) DEBT FUNDS MIRAE ASSET ULTRA SHORT TERM BOND FUND (MAUSTBF) (earlier known as MIRAE ASSET LIQUID PLUS FUND), an open ended debt scheme: The investment objective of the scheme is to seek to generate returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. This scheme is meant for investors to deploy their funds for a short period of time. The fund will be managed according to the investment objective, thereby seek to generate reasonable returns commensurate with low risk. The scheme will invest in money market and other debt securities and shall maintain high liquidity for the purpose of meeting the liquidity requirements of the investors. The scheme has underperformed its benchmark (Crisil Liquid Fund Index) since its inception and over the financial year. Tight liquidity conditions took a toll on the scheme during the second quarter of the year as investors redeemed from the fixed income schemes to take advantage of attractive fixed deposit rates. The scheme has underperformed mainly due to higher exposure to CBLO/ Repo rate instruments as compared to its benchmark. The net assets of the Mirae Asset Ultra Short Term Bond Fund amounted to 8.91 crores as at March 31, As at March 31, 2009, 56.04% was invested in certificate of deposits and balance in CBLO. Comparison of the performance of Mirae Asset Ultra Short Term Bond Fund with benchmark returns as on 31 st March, 2009:- Scheme Name NAV as on CAGR Benchmark** 31 st March, Returns since returns (%) 2009 inception* (%)^ (CAGR) Mirae Asset Ultra Short Term Bond Fund - Regular Plan - Growth % 8.84% The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. CAGR - Compounded Annualized Growth Returns * Date of Allotment/ Inception date:- 5 th March 2008 ** Benchmark:- CRISIL Liquid Fund Index ^ Past performance may or may not be sustained in future. INTERVAL FUNDS MIRAE ASSET INTERVAL FUND (MAIF), a debt oriented interval scheme The investment objective of the schemes is to seek to generate returns with low volatility through a portfolio of debt and money market instruments with a provision to offer liquidity at periodic intervals. There is no assurance OR guarantee of returns. The credit quality of the portfolios will be maintained and monitored using in-house research capabilities as well as inputs from external sources such as independent credit rating agencies. The investment team will primarily use a top down approach for taking interest rate view, sector allocation along with a bottom up approach for security / instrument selection. The bottom up approach will assess the quality of security / instrument (including the financial health of the issuer) as well as the liquidity of the security. Investments in debt instruments carry various risks such as interest rate risk, reinvestment risk, credit risk and liquidity risk etc. Whilst such risks cannot be eliminated, they may be minimized through diversification and effective use of hedging techniques. Mirae Asset Interval Fund - Quarterly Plan - Series 1 (MAIF - QP - SI) The scheme has underperformed its benchmark (Crisil Liquid Fund Index) since its inception. The scheme witnessed significant outflow during the second quarter as investors preferred to redeem from fixed income funds amid risk aversion during the global liquidity crisis. The scheme has underperformed mainly due to higher exposure to CBLO / Repo rate instruments as compared to its benchmark. Mirae Asset Interval Fund - Quarterly Plan - Series 2 (MAIF - QP - SII) The scheme has underperformed its benchmark (Crisil Liquid Fund Index) since its inception. The scheme witnessed significant outflow during the second quarter as investors preferred to redeem from fixed income funds amid risk aversion during the global liquidity crisis. The scheme has underperformed mainly due to higher exposure to CBLO / Repo rate instruments as compared to its benchmark. 7

9 Mirae Asset Interval Fund - Monthly Plan - Series 1 (MAIF - MP - SI) The scheme has underperformed its benchmark (Crisil Liquid Fund Index) since its inception. The scheme witnessed significant outflow during the second quarter as investors preferred to redeem from fixed income funds amid risk aversion during the global liquidity crisis. The scheme has underperformed mainly due to higher exposure to CBLO / Repo rate instruments as compared to its benchmark. The net assets of Mirae Asset Interval Fund - Quarterly Plan - Series I amounted to Rs crore as at March 31, 2009 while the net assets of Mirae Asset Interval Fund - Quarterly Plan - Series I amounted to Rs crore as at March 31, As at March 31, 2009, 100% of the net assets were invested in CBLO for Mirae Asset Interval Fund-Quarterly Plan Series I & II. Comparison of the performance of Mirae Asset Interval Fund with benchmark returns as on 31 st March, 2009:- Scheme Name NAV as on Absolute Benchmark** 31 st March, Returns since returns (%) 2009 inception* (%)^ (Absolute) Mirae Asset Interval Fund - Quarterly Plan - Series - I Mirae Asset Interval Fund - Quarterly Plan - Series - I - Regular Growth Mirae Asset Interval Fund - Quarterly Plan - Series - II Mirae Asset Interval Fund - Quarterly Plan - Series - II - Regular Growth Scheme Name NAV as on Absolute@ Benchmark**@ 12 th February, Returns since returns (%) 2009@ inception* (%)^ (Absolute) Mirae Asset Interval Fund - Monthly Plan - Series - I Mirae Asset Interval Fund - Monthly Plan - Series - II - Regular Growth The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. * Date of Allotment / Inception date:- MAIF-QP-SI - 13 th August 2008 MAIF-QP-SII - 12 th September 2008 MAIF-MP-SI - 17 th September of Expiry: February 12, 2009 ** Benchmark:- CRISIL Liquid Fund Index ^ Past performance may or may not be sustained in future. During the year under review, Mirae Asset Interval Fund - Monthly Plan - Series I was wound up in compliance with SEBI Circular dated December 12, STATUTORY DETAILS MIRAE ASSET MUTUAL FUND Mirae Asset Mutual Fund has been set up as a trust sponsored by Mirae Asset Global Investments Company Limited, a company incorporated in South Korea. (liability restricted to their contribution of Rs. 1 lakh each to the corpus) with Mirae Asset Trustee Company Private Limited as the Trustee (Trustee under the Indian Trusts Act, 1882) and with Mirae Asset Global Investments (India) Private Limited (MAGIL AMC) as the Investment Manager. Mirae Asset Global Investments Company Limited (MAGICL) is a part of Mirae Asset Financial Group (Mirae Asset). Mirae Asset was established in 1997 and is South Korea s leading independent financial services provider. With Asset Management as its core activity, Mirae Asset is engaged in a broad range of financial services including Investment Banking, Wealth Management and Life Insurance. Other significant activities of the group include Alternate Investment including Private Equity, Venture Capital and Real Estate. 8

10 2nd Annual Report Mirae Asset Trustee Company Private Limited: The Trustee is the exclusive owner of the Trust Fund and holds the same in trust for the benefit of the unitholders. The Trustee has been discharging its duties and carrying out the responsibilities as provided in the Regulations and the Trust Deed. The Trustee seeks to ensure that the Fund and the Schemes floated there under are managed by the AMC in accordance with the Trust Deed, the Regulations, directions and guidelines issued by the SEBI, the Stock Exchanges, the Association of Mutual Funds in India and other regulatory agencies. Mirae Asset Global Investments (India) Private Limited (AMC): Mirae Asset Global Investments (India) Private Limited, a company registered under the Companies Act, 1956 and having its registered office at Unit 606, 6th Floor, Windsor, off CST Road, Kalina, Santacruz (E), Mumbai Mirae Asset Global Investments (India) Private Limited has been appointed as the Asset Management Company (AMC) of Mirae Asset Mutual Fund by the Trustee vide. Investment Management Agreement ( IMA ) dated October 11, 2007 entered into between Mirae Asset Trustee Company Private Limited and Mirae Asset Global Investments (India) Private Limited. The Investment Manager was approved by SEBI to act as the AMC for the Fund vide letter no. IMD/HSV/OTW/109716/2007 dated 30th November, Full Annual Report shall be disclosed on the website ( and shall also be available for inspection at the Head Office of the Mutual Fund. On written request present and prospective unit holders / investors can obtain a copy of the Trust Deed, the Annual Report at a price and the text of the relevant Scheme. The Balance Sheet as at 31 st March, 2009 and the Revenue Account for the year ended 31 st March, 2009 for the various schemes are annexed to this Report. INVESTOR SERVICES Mirae Asset Mutual Fund continues to focus on new initiatives to promote investment education amongst investors. While it had initiated workshops across the country last year in this context, the mutual fund has expanded the scope of its activities to mass media vehicles to enable itself to reach a larger audience of investors. It has recently initiated contribution of articles focusing on investment education particularly Systematic Investment Plan through leading newspaper dailies. In addition, it also participates in media initiatives related to advising investors on investments in different market conditions. The mutual fund has plans to continue on this approach given that it allows dissemination of information to a large audience base. Simultaneously it also plans to increase its presence in investor forums, seminars which offer a platform to directly interact with investors and address their queries related to investments. Dividend declared during the financial year : The NAV particulars of various schemes as on 31 st March, 2009 as well as the details of dividends declared during the period under review are as under:- MIRAE ASSET INTERVAL FUND - QUARTERLY PLAN - Series I Plan / Option wise per unit Net Asset Values (NAV) and Dividend details are as follows: NAV per unit Dividend per unit (Rs.) Scheme / Plan March 31, 2009 Individual Non Individual Mirae Asset Interval Fund - Quarterly Plan - Series I - Institutional Dividend Plan Mirae Asset Interval Fund - Quarterly Plan - Series I - Regular Dividend Plan MIRAE ASSET INTERVAL FUND - QUARTERLY PLAN - Series II Plan / Option wise per unit Net Asset Values (NAV) and Dividend details are as follows: NAV per unit Dividend per unit (Rs.) Scheme / Plan March 31, 2009 Individual Non Individual Mirae Asset Interval Fund - Quarterly Plan - Series II - Institutional Dividend Plan # Mirae Asset Interval Fund - Quarterly Plan - Series II - Regular Dividend Plan # - Scheme / Plan / Option not subscribed for by any investor as on 31 st March, No dividend was declared for any other option/plans during the year / period under review. 9

11 MIRAE ASSET INTERVAL FUND - MONTHLY PLAN - Series I Plan / Option wise per unit Net Asset Values (NAV) and Dividend details are as follows: NAV per unit Dividend per unit (Rs.) Scheme / Plan Feb. 12, 2009 Individual Non Individual Mirae Asset Interval Fund - Monthly Plan - Series I - Institutional Dividend Plan ## Mirae Asset Interval Fund - Monthly Plan - Series I - Regular Dividend Plan ## - Scheme / Plan / Option not subscribed for by any investor as on 12 th February, 2009 MIRAE ASSET LIQUID FUND Plan / Option wise per unit Net Asset Values (NAV) and Dividend details are as follows: NAV per unit Dividend per unit (Rs.) Scheme / Plan March 31, 2009 Individual Non Individual Mirae Asset Liquid Fund - Institutional - Dividend Plan (Daily) # Mirae Asset Liquid Fund - Regular - Dividend Plan (Daily) Mirae Asset Liquid Fund - Regular - Dividend Plan (Monthly) NIL Mirae Asset Liquid Fund - Regular - Dividend Plan (Weekly) Mirae Asset Liquid Fund - Super Inst - Dividend Plan (Daily) # NIL - Dividend not declared during the period under review. MIRAE ASSET ULTRA SHORT TREM BOND FUND Plan / Option wise per unit Net Asset Values (NAV) and Dividend details are as follows: NAV per unit Dividend per unit (Rs.) Scheme / Plan March 31, 2009 Individual Non Individual Mirae Asset Ultra Short Term Bond Fund - Institutional - Dividend Plan (Daily) # Mirae Asset Ultra Short Term Bond Fund - Institutional - Dividend Plan (Weekly) # NIL Mirae Asset Ultra Short Term Bond Fund - Regular - Dividend Plan (Daily) Mirae Asset Ultra Short Term Bond Fund - Regular - Dividend Plan (Monthly) Mirae Asset Ultra Short Term Bond Fund - Regular - Dividend Plan (Quarterly) Mirae Asset Ultra Short Term Bond Fund - Regular - Dividend Plan (Weekly) Mirae Asset Ultra Short Term Bond Fund - Super Inst - Dividend Plan (Daily) # Mirae Asset Ultra Short Term Bond Fund - Super Inst - Dividend Plan (Weekly) # # - Scheme / Plan / Option not subscribed for by any investor as on 31 st March, 2009 NIL - Dividend not declared during the period under review. Note: Post declaration of the dividend, the NAV of the Scheme will fall to the extent of the dividend pay-out and distribution tax, if any. Dividends declared are out of distributable surplus on a daily basis. Hence only ex-dividend NAV per Unit is declared. For daily dividends cumulative dividend for a plan is indicated with record date as the month of dividend and the ex dividend NAV as on March 31, In case of weekly dividends, a day wise listing and cum dividend NAV is given in the above table. 10

12 2nd Annual Report Past performance may or may not be sustained in future. During the year under review, no dividend was declared in Mirae Asset India Opportunities Fund, Mirae Asset Global Commodity Stocks Fund, Mirae Asset Gilt Fund - Savings Plan & Investment Plan and Mirae Asset Cash Management Fund. LIABILITY AND RESPONSIBILITY OF TRUSTEE AND SPONSORS The liabilities and responsibility of the Trustee are in accordance with the SEBI (Mutual Funds) Regulations, 1996, Trust deed and the offer documents of the schemes. The liability of the Sponsor / Settlor is limited to the initial contribution of Rs. 100,000/- towards the setting up of Mirae Asset Mutual Fund. The price and redemption value of the units and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments. There can be no assurance that the Fund s objective will be achieved. Past performance is not necessarily indicative of future results and may not necessarily provide a basis for comparison with other investments. INVESTMENT OBJECTIVE OF THE SCHEMES: Mirae Asset India Opportunities Fund: The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities through predominantly investing in equities, equity related securities. There is no assurance or guarantee of returns. Mirae Asset Global Commodity Stocks Fund: The investment objective of the scheme is to generate long term capital appreciation through an actively managed portfolio investing in equity and equity related securities of companies that are engaged in Commodity and commodities related sectors / sub sectors / industries, with at least 65% of the corpus invested overseas in Asia Pacific and Emerging Markets. There is no assurance or guarantee of returns. Mirae Asset Gilt Fund: (a) Investment Plan: The investment objective of the scheme is to seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of sovereign securities issued and guaranteed by Central and State Government with residual maturity ranging from 1 year to 20 years or higher. (b) Savings Plan: The investment objective of the scheme is to seek to generate returns commensurate with low credit risk by predominantly investing in the portfolio comprising of short to medium term Government securities guaranteed by Central and State Government with an average portfolio maturity duration not exceeding 5 years. There is no assurance or guarantee of returns. Mirae Asset Cash Management Fund: The investment objective of the scheme is to seek to generate returns linked to short end rates like MIBOR and CBLO etc. and provide higher liquidity by investing in a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. Mirae Asset Liquid Fund: The investment objective of the scheme is to seek to generate reasonable returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. Mirae Asset Ultra Short Term Bond Fund (Earlier known as Mirae Asset Liquid Plus Fund) - The investment objective of the scheme is to seek to generate returns with low volatility and higher liquidity through a portfolio of debt and money market instruments. The Scheme does not guarantee any returns. Mirae Asset Interval Fund - Monthly Plan Series I, Quarterly Plan - Series I & II The investment objective of the scheme is to seek to generate returns with low volatility through a portfolio of debt and money market instruments with a provision to offer liquidity at periodic intervals. There is no assurance OR guarantee of returns. 11

13 BASIS AND POLICY OF INVESTMENTS UNDERLYING THE SCHEME OF MIRAE ASSET MUTUAL FUND Investment policies of the Funds reflect restrictions for mutual fund investments established by SEBI. Avenues for investment in equity are identified on the following criteria: 1. Sound Management 2. Good track record of the Company 3. Potential for future growth 4. Industry scenario 5. Liquidity of the stock 6. Any other in the opinion of AMC Avenues for investment in debt are identified on the following criteria: 1. Economic Scenario 2. Liquidity 3. RBI Stance 4. Credit Risk 5. Any other in the opinion of AMC ACKNOWLEDGEMENTS The Trustees wish to thank the Government of India, the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), and the Association of Mutual Funds in India (AMFI) for their support and directions. The Trustees would also like to thank the Fund s Auditors, Custodian, Registrar & Transfer Agent, Bankers, Distributors, Brokers and all other service providers for their valuable support. The Trustees also wish to thank all unit holders for their strong support. On behalf of the Board of Directors Mirae Asset Trustee Company Private Limited V. B. Haribhakti S. T. Gerela Director Director Place: Mumbai Date : June 19,

14 2nd Annual Report Auditors Report To, The Trustee of MIRAE ASSET MUTUAL FUND - MIRAE ASSET INDIA OPPORTUNITIES FUND 1. We have audited the attached balance sheet of MIRAE ASSET MUTUAL FUND MIRAE ASSET INDIA OPPORTUNITIES FUND ( the Scheme ) as at 31 March 2009 and also the revenue account for the period from 10 March 2008 to 31 March 2009 ( the Period ) annexed thereto. These financial statements are the responsibility of the management of Mirae Asset Global Investment Management (India) Private Limited, the Scheme s asset managers. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. We report that: i. We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. ii. The balance sheet and revenue account dealt with by this report are in agreement with the books of account. iii. In our opinion, the balance sheet and revenue account dealt with by this report have been prepared in conformity with the accounting policies and standards specified in the Ninth Schedule to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 ( the SEBI Regulations ). iv. In our opinion, and to the best of our information and according to the explanations given to us, the said financial statements give the information required by the SEBI Regulations as applicable, and give a true and fair view in conformity with the accounting principles generally accepted in India: a) in the case of the balance sheet, of the state of affairs of the Scheme as at 31 March 2009; and b) in the case of the revenue account, of the deficit for the Period ended on that date. For S.R. BATLIBOI & CO. Chartered Accountants Per Surekha Gracias Partner Membership No.: Mumbai, June 19,

15 MIRAE ASSET MUTUAL FUND - MIRAE ASSET INDIA OPPORTUNITIES FUND BALANCE SHEET AS AT 31 MARCH 2009 (All amounts in thousands of Rupees) Schedule 2009 SOURCES OF FUNDS Unit capital 2(b) & 3 1,650,765 Reserves and surplus 2(b) & 4 (573,995) Current liabilities 5 20,225 Total 1,096,995 APPLICATION OF FUNDS Investments 2(c), 6 & ,024 Deposits 7 40,000 Other current assets 8 117,971 Total 1,096,995 The accompanying schedules are an integral part of this balance sheet. As per our report of even date. For S.R. Batliboi & Co. Mirae Asset Trustee Mirae Asset Global Investments Chartered Accountants Company Private Limited (India) Private Limited per Surekha Gracias Mr. S.T. Gerela Mr. B.N.Chakraborty Partner Director Director Membership No Mr. V.B. Haribhakti Mr. Arindam Ghosh Mumbai Director Director & CEO June 19, 2009 Mr. Murthy Nagarajan Head - Fixed Income & Fund Manager Mr. Gopal Agrawal Head - Equity & Fund Manager Mr. Neelesh Surana Sr. Fund Manager - Equity 14

16 2nd Annual Report MIRAE ASSET MUTUAL FUND - MIRAE ASSET INDIA OPPORTUNITIES FUND REVENUE ACCOUNT FOR THE PERIOD FROM 10 MARCH 2008 TO 31 MARCH 2009 (All amounts in thousands of Rupees) 10 March, 2008 Schedule to 31 March, 2009 INCOME Dividend 2(d) 14,497 Interest 2(d) & 9 10,219 Other Income 14 Total 24,730 EXPENSES AND LOSSES Provision for net unrealised loss in value of investments 2(c) & 6(ii) 120,626 Loss on sale/redemption of investments, net 2(d) 389,393 Loss on inter-scheme transfer/sale of investments, net 2(d) 16,401 Management fee 10 13,438 Trusteeship fee Custodian service charges 299 Registrar service charges 2,536 Commission to distributors 10,319 Publicity expenses 875 Audit fee 502 Interest on borrowings 2 Other operating expenses 9, ,387 Less: Expenses reimbursed by AMC (10,930) Total 553,457 Deficit for the period (528,727) Equalisation credit 2(e) 10,032 Deficit transferred to the balance sheet 4 (518,695) The accompanying schedules are an integral part of this revenue account. As per our report of even date. For S.R. Batliboi & Co. Mirae Asset Trustee Mirae Asset Global Investments Chartered Accountants Company Private Limited (India) Private Limited per Surekha Gracias Mr. S.T. Gerela Mr. B.N.Chakraborty Partner Director Director Membership No Mr. V.B. Haribhakti Mr. Arindam Ghosh Mumbai Director Director & CEO June 19, 2009 Mr. Murthy Nagarajan Head - Fixed Income & Fund Manager Mr. Gopal Agrawal Head - Equity & Fund Manager Mr. Neelesh Surana Sr. Fund Manager - Equity 15

17 MIRAE ASSET MUTUAL FUND - MIRAE ASSET INDIA OPPORTUNITIES FUND SCHEDULES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM 10 MARCH 2008 TO 31 MARCH 2009 (All amounts in thousands of Rupees unless specified otherwise) 1. BACKGROUND Mirae Asset Mutual Fund - Mirae Asset India Opportunities Fund ( the Scheme ) was launched as an open ended equity oriented scheme on 11 February The new fund offer of the Scheme opened on 11 February 2008 and closed on 10 March Mirae Asset Investment Management Company Limited with effect from 11 October 2007 is the sponsor of Mirae Asset Mutual Fund ( The Fund ). In accordance with SEBI (Mutual Funds) Regulations, 1996 ( the SEBI Regulations ), the Board of Directors of Mirae Asset Trustee Company Private Limited ( the Trustee ) has appointed Mirae Asset Global Investment (India) Private Limited ( the AMC ) to manage the Fund s affairs and operate its schemes. The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities through predominantly investing in equities, equity related securities. The Scheme offers its investors the following plans: Institutional Plan - Growth Option Institutional Plan - Dividend Option Regular Plan - Growth Option Regular Plan - Dividend Option. (collectively the Plans ) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements are prepared on the accrual basis of accounting, under the historical cost convention, as modified for investments, which are marked-to-market. The significant accounting policies, which are in accordance with the SEBI Regulations and have been approved by the Boards of Directors of the AMC and the Trustee, are stated below. (a) (b) (c) Determination of net asset value - The net asset value of the units of the scheme is determined separately for the units issued under the Plans. - For reporting the net asset values within the portfolio, its daily income earned, including realised profit or loss and unrealised gain or loss in the value of investments, and expenses incurred, are allocated to the related plans in proportion to their respective daily net assets, adjusted for unit capital movement for the day. Unit capital - Unit capital represents the net outstanding units at the balance sheet date, thereby reflecting all transactions relating to the period ended on that date. - Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the unit premium reserve of each Plan, after an appropriate portion of the issue proceeds and redemption payouts is credited or debited respectively to the equalisation account, a mandatory requirement for open ended mutual fund schemes. Investments Accounting for investment transactions - Purchase and sale of investments are recorded on the date of the transaction, at cost and sale price respectively, after considering brokerage, commission, and fees payable or receivable, if any. - Right entitlements are recognised as investments on the ex-rights date. - Bonus entitlements are recognised as investments on the ex-bonus date. 16

18 2nd Annual Report Valuation of investments - Investments in equity shares which have traded during a period of thirty days (prior to the balance sheet date) are stated at the closing prices on the balance sheet date or the last trading day before the balance sheet date, as may be applicable, on The National Stock Exchange of India Limited (Principal Exchange). When on a particular valuation day, a security has not been traded on the principal stock exchange, the value at which it is traded on The Bombay Stock Exchange Limited is used. - Market values of traded futures contracts shall be determined with respect to the exchange on which contracted originally, i.e., futures position contracted on the National Stock Exchange (NSE) would be valued at the closing price on the NSE. The price of the same futures contract on the Mumbai Stock Exchange (BSE) cannot be considered for the purpose of valuation, unless the futures contract itself has been contracted on the BSE. - Investments in fixed income securities are valued as follows: -Securities traded on the balance sheet date (on the stock exchange where a majority (in terms of value) of these securities are principally traded) are stated at the last traded price. - Other fixed income investments are stated at their fair value as determined by the AMC in accordance with the SEBI Regulations and related circulars, based on comparative yields released by an independent agency suggested by the AMFI. On days where such comparative yields are not released, the fair value is determined based on the traded or purchase price or the comparative yields relating to the immediately preceding day. - Treasury Bills, Commercial Paper and Certificates of Deposit are valued at carrying cost, which includes discount accrued on an straight line basis over the period to maturity; wherever market price is available the same is used for valuation. (d) (e) (f) Revenue recognition - Dividend income is recognised on the ex-dividend date. - Interest income is recognised on an accrual basis. - Profit or loss on sale/redemption of investments is determined on the basis of the weighted average cost method. Equalisation account - The purpose of equalisation account is to maintain per unit amount of a Plan s/ Option s share of the Scheme s undistributed income earned during the accounting period, so that continuing unitholders share of undistributed income remains unchanged on issue or redemption of units under that Plan / Option. - When units are issued or redeemed, the total undistributed income from the beginning of the accounting year to the date of the transaction is determined. Based on the number of units outstanding on the transaction date, the undistributed income associated with each unit is computed. The per unit amount so determined is credited and debited to the equalisation account on issue and redemption of each unit respectively. - At period end, the balance in the equalisation account is transferred to the revenue account. Load - Load collected is utilised to meet marketing and selling expenses incurred during the year to the extent considered appropriate by the AMC. Unutilised amount is carried forward to meet future marketing and selling expenses. However, load collected is credited to the income of the scheme as and when it is considered appropriate by the Trustees. 17